Mitigating climate change by reducing greenhouse gas emissions is one of the premier challenges to the international community. With multilateral approaches continuing to fail, states could possibly resort to unilateral regulation that limits emissions within their territory or bans the use and production of particular products. To the extent this affects foreign investors, the question arises whether investment treaties chill or even obstruct such unilateral action because it violates investment law concepts, such as indirect expropriation or fair and equitable treatment. This note therefore assesses the interaction between international investment law and unilateralism that endeavors to mitigate the effects of climate change. It concludes that, contrary to an often voiced concern, investment treaties do not lead to a regulatory chill in this context.
Journal of International Arbitration